COVID-19: Prioritise jobs for young people to avoid lost generation

Ian Mean
Director of Business West Gloucestershire | Business West
15th July 2020

Chancellor of the Exchequer Rishi Sunak must be congratulated for coming to the rescue of our young people with his financial package to encourage apprenticeships and new jobs.

Our young people are among the hardest hit during this Coronavirus pandemic.

And it’s staggering that one third of all 18-24-year olds have lost their jobs or been furloughed during COVID-19.

I believe that, despite the Chancellor’s best intentions his package to save young people from the misery of the dole may not be enough.

The Chancellor announced that there would be increased financial support for apprentices aged 16-18 from £1,000 to £2,000 with incremental incentives for other age groups.

And there would be traineeships with employers paid £1,000 to take on a young person for six months.

Plus, there is a new Kickstart Scheme to alleviate youth unemployment by subsidising work placements to keep young people off the dole.

On the face of it, a very comprehensive financial package for companies.

But when I talked to South Gloucestershire and Stroud College’s Assistant Principal for Apprenticeships, Patrick McLeod, he urged me to perhaps curb my enthusiasm for the package.

“Is anything enough?”, he said.

And he is right. He is not being critical - just realistic.

A job has to be there for a company to create an apprenticeship for it.

And there lies the problem.

So many companies are laying off apprentices or furloughing them that future apprenticeship recruitment is pretty bleak.

In the case of SGS, that means probably only a 50% intake of young people in September when last year it was double that number.

And I also talked to Matt Burgess, principal of Gloucestershire College where I am an honorary vice president.

He told me: “It’s really good the government are having a go on apprenticeships and young people. There are no perfect solutions to the position we are in.

“What it doesn’t do with apprentices is to solve the dilemma about creating a job because an apprenticeship requires a job in the first place.”

Matt Burgess believes that £2,000 is probably not a big enough incentive for a company to pay the wages of a new apprentice.

It seems the threshold to get a small business over the line in taking on an apprentice would be 

closer to £7,000 - that would cover around half the cost of the apprentice in the first year.

Both Matt and Pat agree that by combining the new apprenticeship support money and that from the new Kickstart scheme might go some way to help.

“Under the Kickstart Scheme we are keeping young people occupied for six months but what are their job prospects after that”, said Matt.

Apprenticeships have fallen off a cliff since the fanfare from George Osborne in 2015 - to the point now they are down 20 per cent to under 400,000.

I believe that the government must now finally wake up to reform the apprenticeship levy -paid by companies with an annual salary bill of over £3 million.

Much of this levy money is being spent by companies on management training or MBAs, for instance.

That is not today’s priority - apprenticeships for young people are.

And if this money is not spent by companies it quickly goes back to the Treasury - a real mess in my view.

And while there is a focus on apprenticeships, we must realise that re-training must also be a major part of the government’s work revolution.

It is redundant employees -perhaps in their 40s or 50s when furlough ends in October, who will feel the cold wind of being jobless.

“This is potentially a desperate situation for these older workers made redundant”, said Pat McLeod.

“It is as much a crisis as that of our young people. A guy in his 40s or 50s could go into a long lasting depression by being jobless and that can be both soul and life destroying.”

The spectre of large-scale unemployment in Gloucestershire is probably inevitable.

We simply must ensure that our young people are given every support we can to ensure they do not become the forgotten generation.

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